Photo by Heather Gill on Unsplash

In 1979, I bought my first parcel of farmland. It was near Tribune, and I was a proud new landowner. As I recall, the purchase price was $350 per acre. Today, that land is probably worth somewhere in the $2,000-per-acre range. That mirrors trends in farmland values in other parts of the United States.

In the years since that initial purchase, I have seen many changes in the agricultural sector. They include a decline in planted wheat acres in Kansas from about 12.1 million in 1979 to 7.6 million for the 2024 crop (according to the National Agricultural Statistics Service). Corn, soybeans and milo have filled much of the gap. Other examples are the decline in the number of farms from about 75,000 in 1980 to about 55,500 in 2024.

Macro trends that have affected U.S. agriculture in the past two decades include the following:

  • The advent of large-scale corn-based ethanol production, which went from virtually nothing to over 5 billion bushels of corn used for that purpose by 2021.
  • Greater use of technology in the forms of improved varieties of seeds, precision application of crop inputs and crop monitoring from the sky.
  • The addition of about 398 million acres of cropland since the turn of this century, notably in Brazil and India, but also in other regions.
  • Declining population growth trends in major importers of U.S. crops, especially China.

For me, the backdrop for all of these trends is my experience going through the farm crisis of the 1980s. Some of those memories will stay with me for all of my life. When I think about the current status of agriculture in America, and especially in Kansas, I have deep concerns. The health of the Kansas economy is highly dependent on the viability of the farm sector, and I see a combination of factors — the likes of which we have not faced in my lifetime — that are disturbing.

The chaos of the Trump administration is undermining agriculture in Kansas and across the nation. We are seeing traditional importers of U.S. grains, notably China, go elsewhere. The tariffs imposed by our government are doing far more harm than good for farmers who are being hit hard on the cost side of the equation.

Take your pick — wheat, corn, soybeans, milo — not a single crop shows a positive cash flow. That’s before considering the opportunity cost of the capital used for the inputs, let alone any land debt service. When I refer to opportunity cost, I simply mean that that same capital could be invested in a safe financial instrument, such as a CD, where it would earn interest at a rate above 4% annually.

In recent weeks, I have spoken with bankers in Kansas and nearby states that have heavy concentrations of agricultural loans. All of them told me that they are dreading “renewal season,” which is the time when farmers renew operating loans for the 2026 season. There will be some very difficult conversations, because in some instances the farmer borrower will have little choice but to sell some land to improve his or her financial situation.

Other borrowers will see unpaid balances on this year’s operating loans termed out in the hopes that, over time, they can be repaid. In other words, the can will be kicked down the road. Land equity does not pay the fertilizer bill; it takes cash flow to do that.

All of this raises the question: What will happen to farmland values?

In the past decade, it seemed few things could get in the way of increases. A significant amount of outside capital was invested in farmland. The land was sometimes referred to by investors as gold with a coupon. While farmers continue to be the primary buyers, there is no doubt that this outside capital provided some support for land values. That capital is now looking at less-volatile assets.

I have had conversations with investors who have put hundreds of millions of dollars in U.S. farmland. Their mood now reflects the concerns that investors have when uncertainties come into the picture. Those uncertainties are in large part the result of the Trump chaos factor.

Recently, I was approached by a farmer who wanted me to team up with him to buy some land to expand his operation. He and I share the same emotional attachment to the land that is a cornerstone value for most farmers. But both he and I are struggling with buying an asset in a market that is headed one way — south. When you cut through all of the chatter, there is one word that defines the agriculture sector today.

That word, whether in Kansas or South Carolina, is unsustainable.

All of this has big consequences for the small towns that undergird Kansas. When farmers tighten their belts, fewer dollars flow into those communities, and that only hastens the depopulation so apparent in many areas of the Great Plains. A way of life is at risk. If the current administration has its way, America will be remade into an island, isolated from the rest of the world. That is not a viable business or social strategy.

The result is that our competitors will gladly fill the void. They are already doing so.

Some observers have suggested that the current situation in U.S. agriculture is different than in the ’80s. That is true in respect to interest rates. There are also fundamental factors at work not present in the 80s. They include the items that I have noted above, along with a troubling trend towards isolationism. Kansas farmers and their peers produce way more grain than can ever be consumed in the United States in a given year. Without reliable export markets, the results cannot be good.

I have heard all of the arguments in favor of higher land values, such as: “They aren’t making any more of it, “Everything will work out” and so forth. Folks, things are not going to work out if the present approach continues. And, yes, as noted above, “they” are adding more land in other countries.

I love the land, and I have great admiration for those who produce our food and fiber. For all of us who are in the ag sector, silence is not an option in light of the fact that we have a looming crisis on our hands. Inaction will have serious consequences on land values for Kansas farmers as well for the state as a whole.

Ben Palen is a Kansas native and a fifth-generation farmer and agriculture consultant in Colorado and Kansas.

Kansas Reflector is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Kansas Reflector maintains editorial independence. Contact Editor Sherman Smith for questions: info@kansasreflector.com.